Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (58057)	9/23/2016 9:54:22 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78702

CRE: I think that you are quite overbiased against CRE and IIRC you've had that viewpoint for a number of years now (since 200? I think). I'm not gonna argue much since I may be biased too (I own some BAM and JLL) and I don't have a very good data either. But here are some counters to what you say. Banks - I haven't seen a single bank branch closure within communities where I live and work. There might be a torrent of closures in the future, but none so far. I've already mentioned my anecdotal perception of in-branch traffic. Regarding repurposing bank buildings - I think you are biased and I think a number of them are easily repurposed. Of course, it depends on location. In downtown (Chicago/NY/Boston/Toronto), the bank branch RE is first floor of a skyscraper in pretty attractive locations. Definitely repurposable. In suburbs, yeah, these are stand-alone buildings, but they still can be converted to retail (which you think is oversupplied already), possibly restaurant, or office space (which you may think is oversupplied too ;)). Once again, their locations are attractive for all of the above. I disagree that you have to raze a bank building to repurpose. Retail - I would agree more with you regarding retail, but my counter thinking is that Americans need social activities and social spaces. So malls are likely to survive as social spaces even if shopping goes even more online. OTOH, I agree that there is a shift of B-C mall traffic into A malls that have more shops, more restaurants, more entertainment. I.e. our A mall still has full occupancy and there were additional adjacent stores built next to it, while C malls are sad sight. OTOH, we have had openings of new strip/area malls that seem to have decent traffic. So there's some of the "old crappy strip malls die", but new ones rise. OTOH again, and we are talking MA here - some C malls and strip malls are in good locations to convert into residential housing. IMO we have shortage of new housing developments and IMO it might be a good switch to convert that CRE into condos/houses. Of course, that would require razing and it may be tough to do with mall owners not being pros in residential housing and also getting permits/etc. Overall, I think you are exaggerating the issues with CRE based on couple themes that you believe in. But I won't argue much more, since as I said, I'm no expert and arguing my side just increases my biases. So you're free to believe whatever you want. ;) Peace.